SNOWMASS VILLAGE — Flat sales taxes and a tanking real estate industry are prompting the town of Snowmass Village to take a conservative approach to its 2009 budget, trimming wherever possible and searching for new revenue sources while doing everything it can to retain its employees and maintain service levels.
“We need to anticipate a storm and we need to anticipate how it’s going to impact us,” Snowmass Village Town Manager Russ Forrest said Tuesday, introducing a daylong special meeting on the budget which will come back for the council to adopt on Oct. 20.
Given the current uncertain economic climate, Town Council decided to take some extra measures with the 2009 budget. It requested a contingency budget should the economic picture for this winter look even worse than anticipated; it asked for more frequent and more immediate sales tax reports to get an “at-a-glance” economic picture through the winter; and it agreed to a staff recommendation to reassess the budget at least twice in the coming months — holding off on budgeting certain items until a clearer picture emerges. It was also decided to hold off on most capital expenditures until at least 2010.
“The whole world is going to see things that’ll make the things we’ve seen [in the U.S. recently] seem minor,” said Rick Griffin, chair of the town’s financial advisory board and a longtime Snowmass real estate agent, referring to Aspen and Snowmass’ large percentage of international guests. “Your restraint is going to be really important.”
At the same time, going along mostly with the flat budget proposed by staff would be prudent, said Councilman Arnie Mordkin.
“We don’t need to pull the plug; I don’t want to pull the plug because it would basically create a panic, and that’s where they are on Wall Street,” he said.
By the numbers
Snowmass’ roughly $30 million budget is made up of a dozen funds, each with its own budget which was carefully reviewed by the council for potential efficiencies at Tuesday’s session.
The largest of these is the catch-all general fund, which is projected to have $15 million in revenues and about $14.7 million in expenses and capital in 2009.
Sales tax revenues to the town, which account for 28 percent of the general fund revenues, are projected to be flat next year for a total of $4.16 million. The town has also budgeted for a 2 percent decrease in skier visits, which impacts its revenues as it gets a percentage of lift ticket sales. Meanwhile, payments on the new town hall double in 2009 with the first principal payment of $330,000 coming due. Utilities, which includes gas and electricity and impacts multiple departments, are budgeted to go up 30 percent in 2009.
Town council members held the line at making any staff cuts or any other decreases in payroll, although the finance department recommended a lower raise percentage and a cutback in health insurance spending.
“When you cut one’s benefits you are in fact cutting one’s salary,” Mordkin pointed out.
Town Finance Director Marianne Rakowski pointed out that one-quarter of Snowmass’ work force has turned over in the past 18 months, due to factors like cost of living and competitive salaries downvalley. It was generally agreed that keeping employees, even if they need to be given a raise to stay with the town, is preferable to losing an employee and undertaking the time and expense of filling that position.
Overall the town will spend 14.8 percent more from its general fund in 2009 than what was originally budgeted in 2008. A large amount of the unexpected increase in 2008 was uncontrolled expenses such as skyrocketing fuel costs.
Perhaps the most hard-hit budget due to current economic realities is the real estate transfer tax, which is 1 percent of real estate transactions in Snowmass. What that fund brings in is expected to dip to $3.2 million in 2009, down from $6.7 million in the banner year of 2007.
Griffin told the council that real estate sales in Snowmass are already down 60 percent to 65 percent, and Base Village sales in 2009 are expected to be half of what they were in 2008.
And although Rakowski adjusted the RETT budget down 23 percent due to the anticipated dip in real estate sales, council members asked her to ratchet down revenues even more.
“This is one of those things we can revisit in the spring after we know what’s going on,” said Mayor Doug “Merc” Mercatoris.
In the meantime, the town will hold off on projects funded by the RETT, such as the entryway and some transit and trails work.
Revenues for the town’s excise tax — which is levied on square footage of homes above and beyond what’s allowed — is also expected to go down: from $1.74 million originally budgeted in 2008 to about $1 million in 2009. Council members urged town staff to explore ways to expand the excise tax, such as charging more or allowing even more square footage.
The marketing and special events department’s $4 million budget, which is funded by a portion of sales taxes, went largely untouched. Town Council members seemed to agree with marketing director Susan Hamley’s plea for a “paradigm shift.”
“During tougher times it’s when you have to be out there more, loving your customers,” she said. “A little more advertising makes the most sense.”
Still, the council cut its $22,000 contribution to the Thursday free concert series, and suggested that the marketing department pick up that cost.
There was some discussion of creating a housing authority — instead of the housing department the town has right now which primarily manages rental apartments — in order to seek out opportunities to build and expand employee housing.
Capital improvement expenses — the majority of which is entryway park improvements — are expected to total little more than $1 million in 2009, down from $8.8 million in 2008 and $16.5 million in 2007.
The council also decided to scale back the Village Shuttle’s Route 8, which serves a large area around the rodeo. The town would have needed $22,000 to improve service on the increasingly popular route; instead it decided to switch the Horse Ranch neighborhood to a paid dial-a-ride option.
The town will, however, spend $29,000 more on plowing local paved trails next year, after local trails board chair Jeff Tippett complained that pedestrians were faced with dangerous, icy trails last winter.
The town’s financial advisory board had a number of suggestions to ensure the budget is sound, including the creation of a capital replacement fund, a policy for using reserve funds, considering raising the rec center’s low fees for residents, and asking Base Village developer Related WestPac to fund a new financial impact analysis to replace the outdated one the town currently relies on.
All in all, council members asked town staff to look for all the little things they could save money on so as not to have to make more drastic cuts later. Suggestions included looking for a sponsor for the community picnic and having employees use mass transit instead of town vehicles.
lutz@aspendailynews.com
